Making Global Value Chains Work for Development by Daria Taglioni; Deborah Winkler

Author:Daria Taglioni; Deborah Winkler
Language: eng
Format: epub
Publisher: The World Bank

Annex 7A. Regression Results

Focusing on global value chain (GVC) integration as a buyer, table 7A.1 shows the results for the full sample of 40 countries in the World Input-Output Database (WIOD) covering the period 1995–2011. For a description of the data, see box 7A.1. Column 1 in table 7A.1 shows the results based on the estimation equation. The production factors labor and capital significantly increase domestic value added. The same applies to the trade-related variables foreign value added for domestic processing (trade) and, most important, our GVC measure of foreign value added embodied in exports (EXGR_FVA). A 10 percent increase in GVC integration as a buyer is expected to increase domestic value added by 0.7 percent. In other words, GVC integration as a buyer helps increase a country’s domestic value added and thus fosters economic upgrading.

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